CrowdfundX NYC Presentation: Global Investment Crowdfunding

1

The Global Investment Crowdfunding IndustryData, Insight & Trends

Jonathan Sandlund [email protected]

Jonathan Sandlund | @jsandlund

Wednesday, July 17, 13

mailto:[email protected]


2

thecrowdcafe.com research, data and analysis on the global investment crowdfunding industry

localinvestors.org live, think, invest local

about me

Jonathan [email protected]@jsandlund








3

Intro to Investment CrowdfundingThe Mechanism



4

Funded$

$

$$

$

the mechanism

FAMILY FRIENDSCUSTOMERS

INVESTORSAFFINITIES X =


5

Funded$$

$$

$

the mechanism




6

Funded$ $

$ $

$

the mechanism




7

Funded$

$

$

$

$

the mechanism




8

Not Funded

$

$

$ $

$

the mechanism




9

reward vs. investment-based

~ $5,000

~$100,000

Average Fundraise


10Jonathan Sandlund | @jsandlund

The Legalities of CrowdfundingTitle II & Title III of the JOBS Act


The JOBS Act

11

Title II Title III

‣ Lifts ban on general solicitation and advertising on security offerings to accredited investors

‣ Provided issuer takes reasonable steps to verify accreditation

‣ Must file amended Form D

‣ Businesses Raise up to $1mm in 12-month period

‣ Investors tiered limits on investment amount

‣ Rule-making includes SEC and FINRA

Crowdfunding for Accredited Investors

Crowdfunding for Everyone


Accredited Crowdfunding IMPACT

12

‣ Will bring dramatic efficiencies to our private capital markets

• Efficiencies = (Internet) * (Private Sector Innovation)

‣ Geographically, socially indiscriminate

‣ Stands to motivate accredited capital off the sidelines and into private markets in an enormous way



Democratized Crowdfunding IMPACT

13

‣ Businesses • Conversion of Social to Financial Capital • New Era of Marketing

‣ Investors • Financial Empowerment• Trust • Meaningful Investment

‣ Society • Equal Opportunity


14

The U.S. Market



platforms: market segmentation

15

Investment Crowdfunding Platforms

Niche/Affinity"Local" (SMBs)Startups


16

Global CrowdfundingWhat can we learn?



Macro-Data: Selected Sample

17

Equity180 Deals

$132 Million

Equity58 Deals

~$15 Million

Debt2,248 Deals$194 Million

Equity27 Deals

$2.2 Million

Equity9 Deals

$784,000

Equity15 Deals

$13 Million* Selected sample of platforms


18

289 Equity

Placements

2,248 Loans

$300+ Million in Crowdfunding Transactions...


19

Crowdfunding ModelsInnovation, Diversity



20

‣ A+ to C Risk Bands Applied

‣ Offer 1, 3, 5 year loans

‣ £5,000 - £1,000,000

‣ Secondary market

‣ Crowdfunded two $80,000 small business loans in under 29 minutes

Debt2,248 Deals$194 Million


21

Discovery


22

Splash Bathroom Accessories Limited


23

Credit Score History


24

Key Financials


25

Questions & Answers


26

$0!

$2,000,000!

$4,000,000!

$6,000,000!

$8,000,000!

$10,000,000!

$12,000,000!

$14,000,000!Monthly Loan Originations Since Inception!

August 2010 June 2013Wednesday, July 17, 13

27

‣ Launched 2010

‣ Sector Focus General (concentration: internet, food & drink)

‣ Lowest Raise $19,000 Highest Raise $2.3 million

‣ Averages (median, n= 48)

‣ Raise $124,800

‣ Equity Offered 16%

‣ Post-Money Valuation $805,000

‣ Number of Investors 52

‣ Investment Size $2,712 (low: $331; high: $16k)

Equity58 Deals

~$15 Million



28

‣ Launched July 2012

‣ Sector Focus Internet

‣ Lowest Raise $15,200 Highest Raise 240,000

‣ Averages (median, n=24)

‣ Raise $64,000

‣ Equity Offered 10%

‣ Post-Money Valuation $520,000


‣ Investment Size $1,070

Equity27 Deals

$2.2 Million


Minimum Investment $16


29

‣ Launched Mid-2012

‣ Sector Focus Consumer Products/Retail

‣ Lowest Raise $440,000 Highest Raise $2.4 Million

‣ Averages (median, n=15)


‣ Investment Size $59,333

Equity15 Deals

$13 Million



30

‣ Domain Expertise Founding team has deep experience investing in consumer product and retail industries

‣ Curated Deal-Flow To date, less than 2% of applications accepted onto the platform

‣ 3 Weeks Time it took Melt to raise $1,000,000


Equity15 Deals

$13 Million


31

The Disruption



32

Crowdfunding

TechnicalDisruptionEntrance of the internet into the private capital formation process.

Cultural Disruption

A desire to connect more meaningfully with the things

we buy, the things we do, and the things we invest in.

Two mega-trends colliding to drive a paradigm shift in early stage capital markets

Investment Crowdfunding


A fundamentally more efficient capital formation process

33

Technical

A Big Bank...

Source: http://www-core.nesta.org.uk/library/images/NestaBanks.jpg


http://www-core.nesta.org.uk/library/images/NestaBanks.jpg

http://www-core.nesta.org.uk/library/images/NestaBanks.jpg

But it’s not just structural change driving the disruption

34

Cultural

It’s cultural.


35

Chicago Booth: Only 13% of Americans trust the stock market

Distrust is pervasive

Chicago Booth Financial Trust Index

Cultural


Today little alternative to public markets

36

Tomorrow individuals empowered to invest in the the companies, causes and people they believe in

Cultural


A cultural shift

37

‣ Web 1.0 The Information Web

‣ Web 2.0 The Connected Web

‣ Web 3.0 The Meaningful Web

Cultural


38

Jonathan [email protected]@jsandlund

Thank You!




CrowdfundX NYC Presentation: Global Investment Crowdfunding

Economy & Finance

Transcript of CrowdfundX NYC Presentation: Global Investment Crowdfunding